Health Information Management

News: Recovery Audit Contractor program to expand nationwide in March

CDI Strategies, November 1, 2007

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Clinical documentation improvement specialists across the country will have to keep another watchdog entity in the back of their minds starting next year, now that CMS is taking the first steps toward implementing its Recovery Audit Contractor (RAC) program nationwide in March 2008.

On October 19, CMS issued a request for proposals for contractors to staff the program, which reviews inpatient and outpatient hospital claims for coding errors and medical necessity issues. The RAC program is currently confined to California, New York, and Florida.

The American Hospital Association (AHA) is strongly opposed to nationwide RAC expansion, noting that RAC contractors receive a percentage of the overpayment that they identify and collect. In a recent letter to CMS, the AHA stated, "This 'bounty hunter-like' payment mechanism gives RACs incentives to aggressively deny any claims that appear at all questionable."



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